ESMEC-ET Electric Portfolio ReportJuly 17, 2014

2

Contents

I. Supply Portfolio Results Page #

A. Key Performance Measures 4

B. Electric Supply Cost Chart – FY14 5

C. Electric Supply Cost Summary – FY14 6

II. Portfolio Hedge Strategy Review

A. Hedge Position Chart 8

B. Block Purchase Plan 9

C. Proforma Hedge Position Chart 10

D. Forward Market Price Reports 11-12

E. Hourly Market Price Reports 13-15

III. Portfolio Billing Rates

A. Portfolio Cost and Billing Rate History 17

B. Electric Supply Portfolio vs. DPL SOS Rate Summary 18

C. Working Capital – Billing Rate Comparison 19

D. FY14 Billing Rates by Rate Schedule 20

E. FY15 Billing Rates by Rate Schedule 21

Appendix 23-29

3

I. Supply Portfolio Results

4

ESMEC-ET Electric Supply PortfolioKey Portfolio MeasuresJune 2014

1. Total Supply Cost ($/MWh)

Actual O/(U) Budget Actual O/(U) Budget % O/(U) Budget

Unit Cost, $/MWh $77.65 ($2.55) $97.45 $14.44 17.4%

Cost @ Volume** $992,305 ($32,560) $15,193,186 $2,251,762 17.4%

* Subject to PJM 60 day settlement

** Represents unit cost variance to budget, does not reflect volumetric valariance to budget

2. Replacement Value - Blocks - Current Market O/(U) Hedge Costs ($MM)

FY 2015 $0.11

FY 2016 (0.06)

FY 2017 0.11

Total $0.16

3. Hedge Summary

Peak Off Total Peak Off Total

FY 2015 80% 75% 78% 85% 67% 77%

FY 2016 60% 56% 58% 64% 67% 65%

FY 2017 20% 19% 19% 21% 33% 26%

4. Actual/ Forecasted Supply Cost ($ Mwh)

Total

Supply Cost $/MWh %

FY 2014 $98.00 $16.96 20.9%

FY 2015 $76.00 ($22.00) -22.4%

FY 2016 $80.00 $4.00 5.3%

YR to YR Incr/(decr)

June 2014* FY 2014 - June YTD *

Minimum Guideline Actual

5

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$/MWh

ESMEC-ET Electric Supply Portfolio Cost FY 2014

Monthly Actual Prior Year YTD Actual Portfolio Budget Billed Rate

Jan 2014 =$165.97

6

Total Supply Cost, Cumulative FY 2014ESMECUpdated: 7/16/2014

Final Final Final Final Final Prelim PrelimDec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Cumulative

PJM Load Charges - WGESEEst. Meter Volume, MWh 12,957 15,026 13,116 13,761 11,725 12,037 12,779 155,908

Energy - DA & RT $125,866 $1,281,377 $386,760 $358,071 $81,221 $44,489 $132,516 $3,075,909Ancillary Charges 88,887 282,428 24,477 14,765 58,123 53,355 27,832 978,814Transmission 54,964 50,562 45,939 50,914 49,457 50,707 61,138 635,194Capacity 237,776 238,594 215,257 241,411 233,693 239,946 130,255 2,720,671ARR/FTR & Marginal Loss (13,722) (35,737) (18,617) (19,414) (11,104) (11,691) (14,610) (193,020)Miscellaneous 0 0 0 0 0 0 0 0

PJM Electric Cost 493,772 1,817,224 653,817 645,748 411,390 376,805 337,131 7,217,568

60 Day Reconciliation (Included in Energy & Ancillary Above) (8,809) 26,952 52,780 (12,773) (4,469) (20,531)

Bilateral Electric Cost 610,100 619,499 560,760 609,546 606,185 610,100 596,786 7,256,202

Other ChargesWGES Service Fee 16,269 18,094 15,317 16,763 14,532 14,648 15,551 193,004WGES Cost to Carry 0 0 7,568 12,132 10,958 11,409 9,798 51,865WGES Cost of Collateral 10,166 5,929 8,064 8,064 5,212 2,390 2,390 94,906WGES Fee for PES Block Delivery 2,530 2,530 2,285 2,526 2,448 2,530 2,448 29,784Renew able (RPS Requirement) 55,242 26,068 26,068 26,068 26,068 26,068 26,068 317,201Other Fees (MD PSC) 2,559 5,362 2,744 2,845 2,319 2,249 2,133 32,656 Subtotal 86,767 57,983 62,045 68,397 61,537 59,294 58,388 719,416

Total Supply Cost $1,190,639 $2,494,705 $1,276,621 $1,323,691 $1,079,113 $1,046,199 $992,305 $15,193,186

Unit Costs, $/MWh Energy $56.80 $126.50 $72.24 $70.31 $58.63 $54.38 $57.07 $66.27 Transmission $4.24 $3.36 $3.50 $3.70 $4.22 $4.21 $4.78 $4.07 Capacity 18.35 15.88 16.41 17.54 19.93 19.93 10.19 17.45 Ancillary Charges & Credit 5.80 16.42 0.45 (0.34) 4.01 3.46 1.03 5.04 Renew able (RPS Requirement) 4.26 1.73 1.99 1.89 2.22 2.17 2.04 2.03 Other 2.43 2.12 2.74 3.08 3.03 2.76 2.53 2.58 Total Supply Cost $91.89 $166.02 $97.33 $96.19 $92.03 $86.91 $77.65 $97.45

Expected Unit Price $73.73 $84.86 $81.17 $79.24 $86.10 $83.25 $80.20 $83.01 Budget Variance $18.16 $81.16 $16.16 $16.95 $5.93 $3.66 ($2.55) $14.44

Hedge Settlement $117,464 ($1,246,219) ($289,131) ($314,890) $111,142 $114,467 $85,145 ($724,775) Unit Cost, $/MWh $2.82 ($29.93) ($6.94) ($7.55) $2.66 $2.74 $2.04 ($4.65)

7

II. Portfolio Hedge Strategy Review

8

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

MWhESMEC- ET -Current Electric Hedge Status, 7/14/2014

Total Load Max Hedge Purchased Min Hedge

Based on FY2014 Gross Annual MWhs of 166,000

Peak Off TotalFY 2015 85% 67% 77%FY 2016 64% 67% 65%FY 2017 21% 33% 26%

Actual Hedge %'s

9

ESMEC-ET Scheduled Block PurchasesAs of 7/16/2014

Block SizeTerm MW Type Delivery Purchase By 7/14/14

Jul 15 - Jun 17 5 Peak DPL 11/30/14 $48.03

FY 2015 - Winter* SuggestedRecommended

Additional %Month On Peak Off Peak Hedge On Peak Off Peak 7/14/14 12/3/13 Increase

Jan-15 80% 55% 3 MW ATC 92% 71% $58.35 $40.66 44%Feb-15 82% 58% 3 MW ATC 94% 76% $52.82 $38.53 37%

*Timing of FY15 additional winter hedges will be driven by market prices during Summer-Fall of 2014

Current Hedge Pro forma Hedge WH NYMEX Close as of:

WH NYMEX Close as of:

10

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

MWh

ESMEC-ET Proforma Electric Hedge Status, 12/31/2014

Total Load Max Hedge Purchased Scheduled Min Hedge

Based on FY 2014 Gross Annual MWhs of 166,000

Peak Off TotalFY 2015 87% 70% 80%FY 2016 85% 67% 77%FY 2017 42% 33% 39%

Pro Forma Hedge %'s

11

12

13

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

ATC Average LMP-RT PJM Western Hub, 1998 - 6/2014

Avg-Monthly Avg-12 Mo

14

0%

50%

100%

150%

200%

250%

300%

Peak Premium Ratio- DPL, 2001 - 6/30/2014

Avg Monthly Avg-12 Mo

15

-$10

-$5

$0

$5

$10

$15

$20

$25

$30

ATC Average LMP-RT PJM DPL Zone Basis, 1999 - 6/30/2014

Avg Monthly Avg-12 Mo

16

III. Portfolio Billing Rates

17

ESMEC-ET Electric Supply PortfolioBudget, Actual and Billing Rates($ kWh)

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Portfolio budget rate $0.0912 $0.0900 $0.1000 $0.1000 $0.0950 $0.0840 $0.0870 $0.0830 $0.0760 (Revised)

Portfolio actual/forecast cost$0.0876 $0.0993 $0.0976 $0.0919 $0.0940 $0.0810 $0.0810 $0.0980 (Revised) Actual o/(u) budget ($0.0036) $0.0093 ($0.0024) ($0.0081) ($0.0010) ($0.0030) ($0.0060) $0.0150

Approximate Weighted Average Billing Rates (1):

Billing months: Jul - Oct $0.0992 $0.0992 $0.1094 $0.1094 $0.0954 $0.0944 $0.0954 $0.0894 $0.1004 Nov - Feb $0.0844 $0.0844 $0.0944 $0.0944 $0.0804 $0.0794 $0.0794 $0.0774 $0.0854 Mar - Jun $0.0814 $0.0844 $0.0944 $0.0944 $0.0804 $0.0794 $0.0794 $0.0849 $0.0854

W/A billing rate $0.0885 $0.0894 $0.0995 $0.0995 $0.0855 $0.0845 $0.0849 $0.0839 $0.0906

(1) Includes primary (GSP), secondary (LGS, SGS) and outdoor lighting (OL/ORL) rate schedules

Preliminary and forecast rates in blue

18

$0.07000

$0.07500

$0.08000

$0.08500

$0.09000

$0.09500

$0.10000

$0.10500

$0.11000

$0.11500

$0.12000

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Portfolio Cost Weighted Average Billing Rate DPL Standard Offer Service Rate

ESMEC-ET Electric Supply Rates ($/Kwh)$/kwh

ESMEC-ET Electric Supply Rates ($/Kwh)$/kwh

19

$0.050

$0.060

$0.070

$0.080

$0.090

$0.100

$0.110

$0.120

($1,500,000)

($1,000,000)

($500,000)

$0

$500,000

$1,000,000

$1,500,000

W/C Avg Balance Actual Cost ($/KWh) Billing Rate($/KWh)

ESMEC-ET Electric Supply PortfolioAverage Working Capital (W/C) Balances Held with Supplier $/KWh

Jan '14 $.166 KWh

20

ESMEC-ET Electric Supply Portfolio Total Supply Cost Billing Rates by Rate Schedule ($ KWh)Fiscal Year 2014

Billing Period Summer Winter Spring

Status Approved Approved Approved

Supplier Billing Months July 2013 - Nov 2013 - Apr 2014 - Oct 2013 Mar 2014 Jun 2014

Meter Read Beginning: Jun 2013 Oct 2013 Apr 2014Meter Read Ending: Oct 2013 Mar 2014 Jun 2014

FY 2014W/A Billing

Delmarva Power Rate Schedule Rate

Secondary (SGS / SGS SH / LGS) $0.0900 $0.0780 $0.0855 $0.0845

Primary (GSP) $0.0875 $0.0755 $0.0830 $0.0821

Outdoor Lights (OL / ORL) $0.0750 $0.0630 $0.0705 $0.0696

Weighted Average Rate $0.0894 $0.0774 $0.0849 $0.0839

Estimated Portfolio Cost

Portfolio Forecast Rate as 3/2014 $0.1000

Original Portfolio Budget Rate $0.0830

21

ESMEC-ET Electric Supply Portfolio 7/15/14Total Supply Cost Billing Rates by Rate Schedule ($ KWh)Fiscal Year 2015

Billing Period Summer Winter Spring

Status Approved Preliminary Preliminary

Supplier Billing Months July 2014 - Nov 2014 - Mar 2014 - Oct 2014 Feb 2015 Jun 2014

Meter Read Beginning: Jun 2014 Oct 2014 Feb 2015Meter Read Ending: Oct 2014 Feb 2015 Jun 2015

FY 2015W/A Billing

Delmarva Power Rate Schedule Rate

Secondary (SGS / SGS SH / LGS) $0.1010 $0.0860 $0.0860 $0.0911

Primary (GSP) $0.0985 $0.0835 $0.0835 $0.0888

Outdoor Lights (OL / ORL) $0.0860 $0.0710 $0.0710 $0.0761

Weighted Average Rate $0.1004 $0.0854 $0.0854 $0.0906

Estimated Portfolio Cost

Original Portfolio Budget Rate $0.0730

Revised Portfolio Budget Rate $0.0760

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Appendix

23

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

kW

ESMEC Portfolio Hourly Load

Hourly Load 30 Day Average

RLR, 7/13 - 6/14 (through 4/14)

24

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

kW

ESMEC Portfolio Hourly Load

Hourly Load 30 Day Average

RLR, 7/12 - 6/13 (through 6/13)

25

ESMEC-ET - Open Block Purchase Transaction LogAs of: 7/16/14

Purchase Delivery Index Size Price # Date Start Stop Type Point Settle (MW) ($MWh)

9 11/14/11 Jul-13 Jun-15 ATC DPL DA 5.00 $53.9512 9/19/12 Jul-14 Jun-15 ATC DPL DA 5.00 $41.9014 4/10/13 Jul-15 Jun-16 ATC DPL DA 5.00 $45.5515 7/2/13 Jul-14 Jun-15 Peak DPL DA 5.00 $50.0016 11/5/13 Jul-14 Jun-16 Peak DPL DA 5.00 $46.8017 11/20/13 Jul-16 Jun-17 ATC DPL DA 5.00 $40.2518 4/29/14 Jul-15 Jun-16 ATC DPL DA 5.00 $48.80

LegendATC = Around the ClockWH = West HubDA = Day AheadRT = Real Time

26

($150,000)

($100,000)

($50,000)

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Monthly Cumulative

ESMEC Electric Mark to Market, 7/16/2014

27

ESMEC-ET Electric Supply PortfolioCapacity and Transmission Tag Summary (MW)

Incr/(Decr) in Incr/(Decr) in

13/14 Year 14/15 Year

Cost ($) Cost ($)

12/13 13/14 14/15 MW % MW %

Unforced Capacity Obligation 33.8 31.3 30.1 (2.5) -7.4% (1.2) -3.8% ($226,573) ($63,676)

Incr/(Decr) in Incr/(Decr) inCal Year Cal Year

2013 Cost ($) 2014 Cost ($)

2012 2013 2014 MW % MW %

Transmission Capacity 30.0 26.7 24.3 (3.3) -11.0% (2.4) -9.0% ($74,246) ($67,048)

(1) PJM Year June 1 - May 31

2014 o/(u) 20132013 o/(u) 2012Calendar Year

13/14 o/(u) 12/13PJM Year (1) 14/15 o/(u) 13/14

Impact of Inc/(decr) in UCAP MW

Impact of Inc/(decr) in Trans Cap MW

28

$15.00

$197.16

$150.53

$196.54 $187.37

$116.15

$171.24

$248.30

$145.38

$166.08

$118.89 $119.92

$0

$50

$100

$150

$200

$250

$300

06/07 -Pre

RPM

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18

$/MWDPJM - DPL Capacity Prices

Final Zonal Net Load Prices through 14/15, PJM Base Residual Clearing Prices thereafter

29

ESMEC-ETMaryland Renewable Portfolio Requirements Based on Chapters 583, 556 and 653 enacted May 22, 2012 Required %'s Based on Grandfathered %'s per SB791 Estimates in BlueReport as of: 7/11/14

Required %

Amount

Total REC Quantity

Requirement

REC Quantity

Purchased to Date

% Requirement Purchased

to Date

Purchase Cost

($/MWh)

($) Purchased

Cost to Date

Actual or Estimated

Annual Cost

$/MWh Cost per Portfolio Usage

Required % Amount

Total REC Quantity

Requirement

REC Quantity

Purchased to Date

% Requirement Purchased to

Date

Purchase Cost

($/MWh)

($) Purchased

Cost to Date

Actual or Estimated

Annual Cost

$/MWh Cost per Portfolio Usage

2012 173,040 6.40% 11,075 11,075 100% 4.15$ 45,959$ 45,959$ 0.27$ 0.1000% 173 173 100% 170.00$ 29,417$ 29,417$ 0.17$ 2013 171,402 8.00% 13,712 13,712 100% 15.67$ 214,870$ 214,870$ 1.25$ 0.2000% 343 343 100% 170.00$ 58,277$ 58,277$ 0.34$ 2014 171,402 10.00% 17,140 2,449 14% $15.85 38,817$ 271,672$ 1.59$ 0.3000% 514 - 0% -$ -$ 87,415$ 0.51$ 2015 171,402 10.10% 17,312 -$ -$ 0.4000% 686 -$ 2016 171,402 12.20% 20,911 -$ -$ 0.5000% 857 -$ 2017 171,402 12.55% 21,511 -$ -$ 0.5500% 943 -$ 2018 171,402 14.90% 25,539 -$ -$ 0.9000% 1,543 -$ 2019 171,402 16.20% 27,767 -$ -$ 1.2000% 2,057 -$ 2020 171,402 16.50% 28,281 -$ -$ 1.5000% 2,571 -$ 2021 171,402 16.85% 28,881 -$ -$ 1.8500% 3,171 -$ 2022 171,402 18.00% 30,852 -$ -$ 2.0000% 3,428 -$ 2023 171,402 18.00% 30,852 -$ -$ 2.0000% 3,428 -$

Required %

Amount

Total REC Quantity

Requirement

REC Quantity

Purchased to Date

% Requirement Purchased

to Date

Purchase Cost

($/MWh)

($) Purchased

Cost to Date

Actual or Estimated

Annual Cost

$/MWh Cost per Portfolio Usage

Total Cost ($)

$/MWh Cost per Portfolio Usage

2012 173,040 2.5% 4,326 4,326 100% 0.69$ 2,985$ 2,985$ 0.02$ 78,361$ 0.45$ 2013 171,402 2.5% 4,285 4,285 100% 3.35$ 14,355$ 14,355$ 0.08$ 287,501$ 1.68$ 2014 171,402 2.5% 4,285 612 14% 8.00$ 4,896$ 34,280$ 0.20$ 393,368$ 2.30$ 2015 171,402 2.5% 4,285 -$ -$ -$ 2016 171,402 2.5% 4,285 -$ -$ -$ 2017 171,402 2.5% 4,285 -$ -$ -$ 2018 171,402 2.5% 4,285 -$ -$ -$ 2019 171,402 0.0% -$ -$ 2020 171,402 0.0% -$ -$ 2021 171,402 0.0% -$ -$ 2022 171,402 0.0% -$ -$ 2023 171,402 0.0% -$ -$

Calendar Year

Compliance

Portfolio Usage (MWh)

Tier I Solar - SREC

Calendar Year

Compliance

Portfolio Usage (MWh)

Tier II All Tiers